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According to Warren Buffett, one of the most important things when it comes to finding stocks to buy is something that has protection from disruption. And the FTSE 100 has some great examples.
One that doesn’t always get the attention it deserves is Compass Group (LSE:CPG). The contract catering firm isn’t exactly a household name, but its competitive position is incredibly strong.
Economic moats
If a business starts doing well, it’s only a matter of time until competitors start to think about copying it. So to be successful over the long term, a company needs something that rivals can’t easily emulate.
Barriers to entry in the contract catering industry are relatively low – there are no patents or anything like that. But Compass gets a big advantage from the scale of its operations.
The ability to order in greater volume means the opportunity to negotiate lower…
